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Long-term yields held near three-week highs ahead of another wave of economic data.
What’s happening
-
The yield on the 2-year Treasury
TMUBMUSD02Y,
4.210%
fell 3 basis points to 4.20%. Yields move in the opposite direction to prices. -
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.649%
eased 3 basis points to 3.65%. -
The yield on the 30-year Treasury
TMUBMUSD30Y,
3.717%
fell 1 basis point to 3.71%.
What’s driving markets
Thursday’s economic data is set to include a revision to third-quarter GDP, weekly jobless claims, and the Conference Board’s index of leading economic indicators. Friday will see the release of the PCE price index, the Federal Reserve’s preferred measure of inflation.
“We expect bond yields to head higher in the near term as the Federal Reserve hikes policy rates to 4.75%–5.00% in Q1 2023,” said analysts at Credit Suisse.
Economists at Mizuho say the core PCE data may come in above expectations, which will “drive a wedge between the market’s more benign view on inflation versus the Fed’s view.”
